Tuesday, July 17, 2012

Libor-rigging suits could cost Bank of America $4 billion

Bank of America could eventually be forced to pony up $4.2 billion in legal settlements connected to the Libor-rigging scandal, according to analysts with Keefe, Bruyette and Woods.

In a research note published Tuesday, the investment firm analysts speculate on the potential liability of big banks that help determine the key interest rate in the wake of Barclays' $450 million settlement of charges that its employees manipulated the Libor rate, keeping it artificially low. A number of other banks have disclosed that they, too, are under investigation.

Bank of America has not been identified as being under investigation for falsifying Libor submissions, but the Charlotte bank is a defendant in a civil suit brought by Charles Schwab making similar allegations.

KBW's liability estimates are based on the dollar value of derivatives each bank holds that are tied to Libor.

JPMorgan Chase could be on the hook for $4.8 billion, the analysts estimate, and Citigroup could pay $3.1 billion. The industry as a whole could make $35 billion in settlements.

The analysts pointed out, however, that the burden of proof against these banks will be difficult to meet, and say it will likely be tied up in the legal system for five to eight years.

9 comments:

Anonymous said...

Thanks for another pro BAC comment.

Anonymous said...

Come back tomorrow when our interns (between beers at VBGB) will post a report on why Bank of America likes to kick your dog and slap your granny.

Sincerely,
Charlotte "Last One Out Turn Out The Lights" Observer

Foghorn Leghorn said...

Another fine example why we need to trust bankers. They are smarter than everyone else and need no big, bad leftist government thugs forcing anti-American regulations down their throats.

Garth Vader said...

@ Foghorn,

The Fed itself is supposed to be the "regulator" of the banking industry. But has been widely reported (translation: reported everywhere except here at the Bankster Bugle) the Fed knew about the manipulations to LIBOR as early as 2007 and did nothing about them. Because in reality the Fed works for the banks, not for the public.

The only way to restore trust in the economic system is to ditch fractional reserve banking and debt-based money and restore asset-based money such as was established by the country's original currency legislation, the Coinage Act of 1792. The Constitution says Congress shall "COIN money" not PRINT it.

Robert said...

Man, steal 950 billion tax payer dollars and have to only pay 4.2 billion for scamming people, pretty good gig....

JWMJR said...

Since the great O limits the size of posts I would ask the reader th google "Stacking Fraud Like Cordwood" include the quotation marks.

Anonymous said...

Will BAC ever "get ahead'" with all these fines and loss of profits for the future because of these negative events?

JWMJR said...

These fraudsters can only hope that the LI(E)BOR scandal will cost them "only" $4 billion. The class action ;layers are going to come after them big time. Every investor, mutual fund and IRA that holds instruments that has a rate of return based on the LIBOR number has been cheated and I don't think they are jusy going to say "oh well now what."

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